Johnson v. Sawyer
Decision Date | 21 August 1997 |
Docket Number | No. 96-20667,96-20667 |
Citation | 120 F.3d 1307 |
Parties | -6291, 97-2 USTC P 50,616 Elvis E. JOHNSON, Plaintiff-Appellee, v. Robert C. SAWYER, et al., Defendants, Robert C. Sawyer, et al., Defendants-Appellants. |
Court | U.S. Court of Appeals — Fifth Circuit |
Kendall C. Montgomery, John M. O'Quinn, O'Quinn, Kerensky, McAninch & Laminack, Houston, TX, Larry A. Campagna, Houston, TX, Vincent Lee Marable, III, Wharton, TX, for Plaintiff-Appellee.
Thomas J. Clark, Jonathan S. Cohen, U.S. Department of Justice, Tax Division, Appellate Section, Washington, DC, for Defendants-Appellants.
Appeals from the United States District Court for the Southern District of Texas.
Before SMITH, BARKSDALE and BENAVIDES, Circuit Judges.
Of the numerous issues raised in this appeal, two are critical to our disposition: whether tax return information, once disclosed in open court, loses its confidentiality such that its subsequent publication by a federal employee does not violate 26 U.S.C. § 6103, which prohibits disclosure of such information except under limited, non-applicable, circumstances; and whether, on remand, this case must be reassigned.
For the second time, our court reviews a judgment in favor of Elvis E. Johnson for the claimed wrongful disclosure of tax return information in two 1981 press releases issued by the Internal Revenue Service following his guilty plea to, and conviction for, income tax evasion. In 1995, our en banc court reversed Johnson's $10 million Federal Tort Claims Act judgment against the United States and remanded for dismissal of that claim. Johnson v. Sawyer, 47 F.3d 716, 737-38 (5th Cir.1995) (en banc). Johnson then proceeded against IRS officers (Appellants) responsible for the releases. Based partly on an instruction that the releases wrongfully disclosed tax return information, the jury awarded Johnson $9 million. Because that instruction was erroneous in part and affected the outcome of this case, we VACATE and REMAND for a new trial. And, to ensure, inter alia, the appearance of impartiality, the case is to be REASSIGNED.
In 1981, Johnson was an executive with American National Insurance Company (ANICO) and was employed at its headquarters in Galveston, Texas. Johnson began in 1951 with ANICO as an agent in Springfield, Missouri. Because of his success, he was transferred to Galveston in 1971. By 1976, he had become executive vice-president and a member of the board of directors. He and Orson Clay, ANICO's president, reported directly to the board. In an intra-company circular, Clay described Johnson as "the most successful field man and home office executive in [ANICO's] history".
In 1976, the IRS began auditing ANICO and its key executives, including Johnson and his wife. Upon discovering discrepancies, the examining agent referred the matter to the IRS Criminal Investigation Division (CID), which assigned the case to appellant Robert G. Stone, a Special Agent with the CID.
Following an investigation, the CID referred the case to the Department of Justice to prosecute Johnson and his wife for tax evasion for the years 1974 and 1975. The case was assigned to Assistant United States Attorney James L. Powers. In February 1981, Powers advised Johnson's attorney, Robert I. White, that he planned to seek an indictment of both Johnson and his wife; but, if Johnson pled guilty to a one-count criminal information that he underpaid his 1975 taxes (by approximately $3,500), the Government would not prosecute his wife for either 1974 or 1975, would not prosecute Johnson for 1974, and would recommend a probated sentence.
According to Johnson, he kept ANICO's executive committee, president (Clay), and counsel fully apprised of the situation. Evidently, White and Johnson were reassured that, even if Johnson pled guilty to a crime, as long as there was no publicity that would embarrass ANICO, Johnson could continue with ANICO as executive vice-president. White therefore determined to ensure that Johnson's identity would never be disclosed--that if someone looked at the district court file, he could not associate Johnson with ANICO.
White notified Powers that publicity of a conviction would be extremely damaging, and Powers evidently agreed, as he had with White on other occasions for other defendants, to preserve Johnson's relative anonymity. Powers agreed to let White seek the district court's authorization to have the presentence investigation performed before charges were filed. The completed presentence investigation report was delivered to the court on 2 April 1981. Johnson's case was to be heard on Friday, 10 April, at 4:00 p.m. in the Galveston courthouse. White requested that the criminal information be filed at the time of the hearing, along with Johnson's waiver of indictment and the plea bargain agreement; and that the "Defendant's Information" sheet give White's office address for Johnson's address. Powers agreed to these precautions and agreed that no press release would be issued concerning Johnson. But, Powers did not advise the IRS of this "no publicity" agreement.
At approximately 4:00 p.m. on 10 April, proceedings on the record commenced. White had ensured that the district judge (Judge Gibson) had no other business that Friday afternoon, and Powers had agreed to that time to minimize the risk of publicity. White and Johnson searched the Galveston courthouse for members of the press and found none, so the only people present for the hearing were Johnson, White, Powers, the district judge, and court personnel. Johnson signed and filed a waiver of indictment.
The "Defendant Information" sheet, identifying Johnson as "Elvis Johnson" of "1100 Milam St., 28th Floor, Houston, Texas 77002", was also filed. In fact, although Johnson's full name is Elvis E. Johnson, he was known as "Johnny" Johnson by friends, ANICO executives and employees, and business acquaintances; he signed all correspondence as "Johnny". In addition, Johnson's home address was 25 Adler Circle, in Galveston.
A criminal information, charging Johnson with tax evasion for 1975 in the amount of $3,474.97, was filed; and he signed and swore to a written "Plea of Guilty". After a FED. R.CRIM. P. 11 hearing, the court sentenced Johnson to six months confinement, suspended, and one-year of supervised probation. None of the documents filed on 10 April mentioned Johnson's employment. (As discussed infra, properly excluded from evidence was the transcript of the plea hearing; it reflects that the district judge did make reference to Johnson being "an executive with American National Insurance Company".) The following Monday, 13 April, a judgment of conviction and sentence was filed.
According to Johnson, when returning from court on 10 April, he notified ANICO's president (Clay) about what transpired, and Clay responded favorably that the IRS matter was over and that he (Johnson) should move forward because he was important to ANICO. By the end of business on Tuesday, 14 April, Johnson informed other members of ANICO's executive committee that he had pled guilty to a tax crime and put the matter behind him. Johnson testified that he was not asked to resign; instead, he was told the "best interest of the company is served by keeping you exactly where you are".
The day before, however, Monday, 13 April, appellant Sally Sassen, an IRS Public Affairs Officer, had prepared the following press release about Johnson's conviction, entitled "Insurance Executive Pleads Guilty in Tax Case":
GALVESTON, TEXAS--In U.S. District Court here, Apr. 10, Elvis E. Johnson, 59, plead [sic] guilty to a charge of federal tax evasion. Judge Hugh Gibson sentenced Johnson, of 25 Adler Circle, to a six-month suspended prison term and one year supervised probation.
Johnson, an executive vice-president for the American National Insurance Corporation, was charged in a criminal information with claiming false business deductions and altering documents involving his 1974 and 1975 income tax returns.
In addition to the sentence, Johnson will be required to pay back taxes, plus penalties and interest.
Sassen had prepared the release with the help of Special Agent Stone, relying, with one exception (the paragraph regarding back taxes, penalties and interest), solely on information she received from him. She testified that she did not ask Stone about the source of that information, although she knew Stone had not been in the courtroom for Johnson's hearing on 10 April. As noted, the last paragraph of the release (penalty portion) was not based on information received from Stone. It was boilerplate language in the form Sassen used.
According to Stone, he learned of the conviction from Powers on either Friday, 10 April, or Monday, 13 April. Stone testified that, based on that conversation, he prepared on Monday, 13 April, the following internal "Report of Legal Action":
On [10 April 1981] AUSA JIM POWERS filed a criminal information charging JOHNSON with tax evasion under 26 USC 7201 for the years 1974 and 1975. JOHNSON plead [sic] guilty on the same day to one count of 7201 for 1975 and the 1974 count was dismissed. Judge GIBSON sentenced JOHNSON to 6 months to serve with this 6 months being suspended and placed him on 1 years supervised preparation [sic]. No fine was assessed and no appeal is expected. This legal action occurred in Galveston.
In addition to not attending Johnson's hearing, neither Sassen nor Stone had any of the court documents. Stone, who was in Houston, was not advised by Powers about either the plea agreement or hearing in Galveston until approximately two hours before the hearing, when Powers was leaving his Houston office to travel to Galveston for the hearing. Because of such short notice, another matter prevented Stone from attending the hearing. Stone, however, did not check the public record before giving the information to Sassen.
Sassen prepared the release...
To continue reading
Request your trial-
Willey v. Harris Cnty. Dist. Attorney
..."extraordinary" and "rarely invoked" power. In re DaimlerChrysler Corp. , 294 F.3d 697, 700 (5th Cir. 2002) (quoting Johnson v. Sawyer , 120 F.3d 1307, 1333 (5th Cir. 1997) ). We have used two independent tests to decide whether to reassign. The first test considers three factors:(1) whethe......
-
Doe v. Chao
...interpreted § 7217(c) to allow recovery of statutory damages without requiring proof of actual damages. See, e.g., Johnson v. Sawyer, 120 F.3d 1307, 1313 (5th Cir.1997) (stating that under § 7217 "a plaintiff is entitled to his actual damages sustained as a result of an unauthorized disclos......
-
Shaw v. Toshiba America Information Systems, Inc.
...meaning of the statutory text if "it would lead to a result so bizarre that Congress could not have intended it." Johnson v. Sawyer, 120 F.3d 1307, 1319 (5th Cir.1997) (internal quotations omitted); see also Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 3250, 73 L......
-
Coggin v. Longview Independent School Dist.
...on by the district court, those grounds must at least have been proposed or asserted in that court by the movant." Johnson v. Sawyer, 120 F.3d 1307, 1316 (5th Cir.1997); see also Breaux v. Dilsaver, 254 F.3d 533, 538 (5th Cir.2001) ("Although this court may decide a case on any ground that ......